The beer market dynamics in Russia is approaching zero, yet major brewers are divided into those who developed considerably in 2017 and those who considerably reduced their volumes. For instance, company Efes has managed to substantially extend their sales due to restrained pricing policy and activity in the modern trade. Heineken has also demonstrated an excellent performance promoted by significant increase of advertisement budgets launching a non-alcohol sort of the title brand and unusual activity in the economy market segment. Carlsberg and AB InBev have been focusing on margins and lost a market share of their inexpensive brands. Serious dependence on PET package and mass enthusiasm about Zhigulevskoe have negatively impacted the most of big regional brewers, that have been for the first time pressed by the leaders in the key sales channels, especially in Volga and Central regions. In the small business there has been a noticeable slowdown in appearing of new restaurant breweries, yet the number of craft breweries has been growing rapidly. In 2018, the beer market is likely to grow a little, while the share of AB InBev Efes may decrease due to the integration. ...
“Catalogue of Russian Beer Producers 2018” includes 1070 businesses ranging from large subsidiaries of international companies to rather small restaurant and craft microbreweries.The catalogue includes 32 large breweries, 75 regional breweries, 693 industrial mini- and microbreweries as well as 270 restaurant breweries. ...
Global hop marketA local alternative to mass beer suggested by independent brewers has been successful and is now altering the global market. Beer is becoming more diversified, so transnational companies have to accept the new game rules and to switch focus to young and fast growing markets. All these processes increased the demand for aroma and bitter hop as well as their acreage expansion on two continents. However now there appeared a downward trend of alcohol consumption in the world, so even special sorts can soon turn to be sufficient. In this connection the dynamic American hop market is already facing some problems. EU hop producers have become more cautious, they are not racing to exceed the demand and look forward with more confidence, judging by the contract terms.
Hop Market in RussiaGermany still dominates the Russian market, yet over the recent two years one has been able observe a continuous success of Czech hop suppliers. Their expansion and growing popularity of hops from the United States became the drivers of supplies growth in 2016 despite the preceding modest harvest crop in the EU, as well as the factor of relative stability in 2017. In this connection, in 2017, the ratio of the varieties continued to shift towards the aroma ones, and the supplies of Magnum hop and other alpha varieties were reduced. However, the import of bitter hop pellets is partially replaced by extracts, especially from the major beer manufacturers. Total volumes of alpha acid supplies, according to our estimation, decreased by approximately 5% and returned to the level of 2015. Barth Haas Group continues dominating the hop products market; HVG also increased its weight. At the same time, Morris Hanbury significantly reduced the supplies in 2017.
Anadolu Efes and SABMiller Strategic Alliance
SABMiller to transfer its Russian and Ukrainian beer businesses to Anadolu Efes
Anadolu Efes to transfer a 24% equity stake to SABMiller by way of a capital increase
Anadolu Efes to be the vehicle for both groups' investments in the Territory
Following the capital increase, the Anadolu Group will control 42.81% of Anadolu Efes's enlarged share capital
Pursuant to a shareholders' agreement between the Anadolu Group and SABMiller, the Anadolu Group will maintain control of Anadolu Efes after completion of the capital increase and business contribution. SABMiller will have customary minority protection rights
The combined Russian business will have a strong number 2 position in value share terms, with a highly attractive brand portfolio and is expected to yield significant cost synergies of at least US$120m per year, and provide additional revenue synergy opportunities
Anadolu Efes and SABMiller to share best practice and Anadolu Efes to develop SABMiller's international brands in the Territory
The transaction is subject to confirmatory due diligence, execution of legally binding documentation, regulatory approvals and approval by Anadolu Efes's shareholders in General Assembly of the increase in Anadolu Efes's share capital
SABMiller and Anadolu Efes today announce their intention to form a strategic alliance in terms of which Anadolu Efes will be the vehicle for both groups' investments in the Territory and SABMiller will transfer its beer businesses in Russia and Ukraine to Anadolu Efes. Anadolu Efes will issue 142,105,263 new Anadolu Efes shares to SABMiller, representing a 24% equity stake post capitalisation in the enlarged Anadolu Efes.
In recognition of the long-term nature of the partnership, SABMiller and the Anadolu Group will enter into a shareholders' agreement to ensure that the Anadolu Group will continue to exercise majority control over Anadolu Efes. SABMiller will be represented on the Anadolu Efes Board and will have customary minority investment protection rights. It will also be represented on the board of the combined business in Russia. In addition, both parties have agreed to provide appropriate rights of first offer at fair market value in the event of either party seeking to sell any shares in Anadolu Efes.
SABMiller and Anadolu Efes value SABMiller's Russian and Ukrainian businesses at an enterprise value of approximately US$1.9bn.
In exchange for transferring its Russian and Ukrainian businesses to Anadolu Efes, SABMiller will receive a loan note. Subject to Anadolu Efes shareholders' approval of a non pre-emptive capital increase, Anadolu Efes will issue 142,105,263 new Anadolu Efes shares to SABMiller, representing a 24% equity stake, post capitalisation, in Anadolu Efes. The proceeds of the capital increase will be used to immediately redeem the loan note.
The strategic alliance will result in the enlarged Anadolu Efes strengthening its leading position across the Territory:
The number 2 market position, in value terms, in the large Russian beer market with a valuable portfolio of brands across key market segments, the footprint to compete on a national basis, and value creation through significant cost synergies and potential revenue synergies
A leading market position in Turkey with 89% share of the beer market and a 69% share of the carbonated soft drinks market via Anadolu Efes's 50.3% interest in Coca-Cola Icecek. Turkey is one of the world's high growth economies, with a large population of 74 million people and forecast real (PPP) GDP growth of 5.4% p.a. to 2015 (source EIU)
Leading market positions in the growth beer markets of Kazakhstan, Moldova and Georgia
A high quality portfolio of international and local brands.
Additionally, Anadolu Efes and SABMiller will benefit from the opportunity to distribute each other's international brands across their respective platforms (subject to existing contractual arrangements) and the sharing of best practice.
The transaction is expected to be EPS enhancing for both Anadolu Efes and SABMiller in the first full year following completion.
Commenting on the announcement, Tuncay ?zilhan, Chairman of Anadolu Efes and Anadolu Group, said, "We are delighted to join forces with such a strong business partner as SABMiller and to enlarge the Anadolu Efes business in Russia and Ukraine as we believe this will enable us to better capitalize on the potential growth opportunities in our operating region in line with our long term growth plans". Mr. ?zilhan also added "In addition to the significant synergy opportunities available to us as a result of this partnership, we will command a much stronger position in Russia. Moreover, this deal will further strengthen our overall presence in our operating region as a whole and add significant value to both Anadolu Efes and SABMiller stakeholders."
Graham Mackay, Chief Executive of SABMiller, said, "Both SABMiller and Anadolu Efes have proved to be successful operators in diverse and challenging emerging beer markets and this strategic alliance will allow both our groups to benefit from each other's expertise, and the combination of our resources. Anadolu Efes's leading position in beer and soft drinks in the Turkish market and an alliance for further growth and acquisitions in the CIS and Middle East are highly attractive. The prospects for these markets are excellent. They exhibit positive long term demographic, GDP and beer market growth outlooks. We have admired the achievements of Anadolu Efes for many years and we are looking forward to working closely with them in the future."
Approval Process and Timetable
Anadolu Group, Anadolu Efes and SABMiller have entered into exclusive negotiations and expect to agree definitive legal documentation as soon as possible and to complete the transaction before year end, subject to obtaining clearance from the competition authorities in relevant territories and any other necessary regulatory clearances, and the approval of Anadolu Efes's shareholders at a General Meeting.
The Anadolu Group has irrevocably undertaken to vote in favour of the necessary resolutions in the General Assembly of Anadolu Efes shareholders.
A further announcement will be made in due course.
20 Oct. 2011